Stocks slumped in morning trading on Wall Street Tuesday as trade tensions escalate again with China.
The S&P 500 fell one per cent. The Dow Jones Industrial Average slipped 383 points, or 0.8 per cent, as of 9:57 a.m. Eastern time. The Nasdaq composite shed 1.5 per cent.
The slide marks another sharp twist for markets over the last few days. Wall Street tumbled on Friday for its worst day since April and bounced back on Monday for its best day since May. The swings were prompted by shifting trade sentiment between the U.S. and China.
The latest dip follows China’s Commerce Ministry banning dealings by Chinese companies with five subsidiaries of South Korean shipbuilder Hanwha Ocean, swiping at President Donald Trump’s efforts to rebuild the industry in America.
European markets were lower and Asian markets fell.
Canada’s main stock index, the Toronto Stock Exchange, was up more than one per cent as of 10:00am Tuesday.
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The ongoing trade war between the U.S. and the world has been an unpredictable weight on the market. The trade conflict between the U.S. and China is potentially the most economically consequential, owing to those nations’ positions as the two largest economies in the world.
International shipping and shipbuilding have become a major source of friction between Washington and Beijing, with each side imposing new port fees on each others’ vessels. Those fees went into effect on Tuesday.
The U.S. economy has so far dodged any major impact from the broad and constantly shifting U.S. tariff policy. That could change if nations fall back into a cycle of retaliatory tariffs and companies pass along more of the higher costs to consumers.
The U.S. government shutdown has put a halt to the usual economic updates on inflation, consumer spending and job growth. Wall Street is looking toward the latest round of company earnings and forecasts to get a better sense of the broader economic picture.
JPMorgan Chase slipped 3.8 per cent, despite beating Wall Street’s profit forecasts for its latest quarter. Wells Fargo rose 3.5 per cent after beating analysts’ forecasts.
Health care giant Johnson & Johnson fell 1.8 per cent after announcing that it will separate its orthopedics business into a standalone company.
Treasury yields held relatively steady. The yield on the yield on the 10-year Treasury fell to 4.04 per cent from 4.05 per cent late Friday. Bond markets were closed in the U.S. on Monday for a holiday.
– With files from Global’s Ari Rabinovitch
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